NNEW x-rays funding options available to women entrepreneurs

About 60 percent of the N220 Micro, Small and Medium Enterprises (MSME) fund recently launched by the Federal Government and Central Bank of Nigeria (CBN) is targeted at women-owned businesses. Therefore, NECA Network of Entrepreneurial Women in its characteristic enlightenment programmes organised a roundtable to explore this and various funding options available to women.

The panelists at this forum held weekend in one of the seminar rooms of the Nigeria Employers Consultative Association (NECA) were Adebisi Adedeji, assistant director, head, development finance office, CBN; Valentine Whensu, president, Association of Microfinance Banks, and Sorbari Agara, senior credit officer, Community Development Foundation. The panel discussion was moderated by Aderoju Odunsi, head, NNEW Training Academy.

According to Adedeji, though individual business operators can access the funds if they meet the criteria of the financial institution granting them the loan, the CBN is encouraging targeted groups such as microfinance banks, cooperative societies, deposit money banks and so on, to access the funds and disburse to their customers or members. The loans would then be repaid through the financial institution.

NNEW, which has a vision of promoting entrepreneurship among women, already has a cooperative multipurpose society and also would be launching a Women’s Microfinance Bank early next year. The network is therefore exploring various options to ensure that every of its members that need funds can obtain loans to expand existing businesses or start new ones.

Sorbari Agara, the panelist from Community Development Foundation at the forum, explains that anyone who wants to access loans from CDF must be a financial member of a group, saying “the more money you save, the more you get.

“We don’t interfere with your governance but we give advice where necessary. If your group wants to access loans for its members from CDF, we would assess what you are doing and based on your own working capital, we would give you the money.”

Agara further said “people that do not save cannot access funds. You must have a stake because if you do, you will not want your own money to go down the drain. When you have a stake in it, you will be serious.”

The principle being operated is that as a member of the group, the individual must have savings upon which the group would determine the size of loan the person can take.

Explaining further, she said: “When we give you the loan, you will pay back the money to your group on monthly basis, but the group will pay to CDF on quarterly basis. The loan is divided into four equal parts. The group will pay back the first part after three months and 15 percent interest per annum will be paid on what is left on reducing balance. You do not need to pay any appraisal fee.

“The group will write the application and CDF will come to do the assessment. With the information we gather, we would send the application to the board of CDF for approval. If approved, we would bring the document to you to sign. You do not deposit any money with CDF, we give the loan on trust without collateral. We give the money to the group and the group decides the conditions it will give the money to its members. CDF will visit the group at least three times after disbursing the funds and we would train the loan beneficiaries without charging you.

“If you are outside Lagos, we have a guesthouse that is subsidised except you have somewhere else you can stay. You have to pay your transport to Lagos for the training. That training covers you up to two, three, four rounds of loans from CDF. The next training, CDF will come to you and we call that Participatory Organisational Step Assessment for Development. This is a doorstep delivery. When we come to enlighten you, you do not pay any money until we give you the loan and you pay only the interest on the loan.”

Explaining further, Agara said: “You can actually reduce what you pay as interest. We have planned that this money can be repaid in 12 months, but you can decide to pay up sooner and you pay less interest. If for instance the loan is N100,000 and we plan that you pay N25,000 after a quarter but you pay N40,000, the interest on the remaining N60,000 is less than interest on N75,000. There are groups that even pay back within the first three months.”

OLUYINKA ALAWODE